USA Today: Deficits drop, but debt bomb still ticking

Remember when the federal budget deficit was a huge deal? Hardly a day went by when Republicans didn't accuse President Barack Obama of fiscal negligence - a charge easy to make with annual shortfalls topping $1 trillion.

Nowadays, the deficit rarely comes up as Obama and Republicans spar over foreign policy, executive orders and immigration. It's a curious absence, given the passion the issue once provoked, but politically explainable.

The budget outlook has improved, at least in the near term. This year's deficit could dip below $500 billion, down from $1.4 trillion in 2009.

Earlier this month, the Office of Management and Budget released a 10-year forecast predicting that annual deficits will soon drop to the range of 2 percent of the economy, a level that most economists view as manageable.

Separately, the non-partisan Congressional Budget Office released a long-term budget outlook showing a "substantial imbalance" between the amount government spends and the amount it takes in.

Two conclusions jump out:

» The first is that the massive deficits of Obama's first term look, in retrospect, like an extreme version of what happened in previous recessions when deficits shot up for a few years. Those deficits helped cushion the Great Recession. What's more, they were driven more by plunging tax revenue than by new spending.» The second is that the long-term budget outlook remains very scary, despite better projections on health care spending. Indeed, the CBO forecasts the public debt in 25 years at 106 percent of the economy, a level not seen since the end of World War II.

These debt levels will be driven by the benefit programs that account for more than three-fifths of federal spending.

All of this - the improved budget outlook in the next decade combined with still troubling outlook beyond that - points to the destructiveness of today's politics and to the enormous missed opportunity three years ago.

In 2011, the stars were aligned for a "grand bargain" between the White House and congressional Republicans. The tentative deal would have made significant headway on the long-term deficit outlook by combining tax increases with substantial curbs on entitlements and other spending. But militant House Republicans refused to let Speaker John Boehner cut the deal, and groups on the left clamored against changes to Social Security and Medicare.

Three more years haven't made the long-term problem disappear. Instead, they have given politicians an excuse to avoid difficult decisions. But the day of reckoning is still coming, and as retirees will discover, every year of delay only makes the eventual, inevitable solution more painful.

- USA Today

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USA Today: Deficits drop, but debt bomb still ticking

Remember when the federal budget deficit was a huge deal? Hardly a day went by when Republicans didn't accuse President Barack Obama of fiscal negligence ? a charge easy to make with annual